What is the inflation rate in the UK in 2024?

UK Inflation Holds Steady at 3.5% in Late 2024

In December 2024, the UK’s main measure of inflation, the CPIH (Consumer Prices Index including owner occupiers’ housing costs), remained unchanged at 3.5% compared to the same month the previous year. This marks a period of stability following months of gradual cooling from the peaks seen earlier in the decade. While the annual rate held steady from November, the monthly data shows a slight deceleration, with prices rising by 0.3% in December — down from 0.4% the year before.

This sustained yet moderate inflation rate reflects a balancing act across the economy. Food and energy prices, which drove much of the surge in earlier years, have begun to stabilize, but underlying costs in services and housing continue to exert upward pressure. The Bank of England, closely monitoring these trends, has maintained a cautious stance on interest rates, aiming to avoid reigniting inflation while supporting growth.

The stability in CPIH suggests that the worst of the cost-of-living crisis may be behind us, but for many households, prices remain significantly higher than pre-2022 levels. Wages, although rising, have not always kept pace, leaving disposable income strained. Retail, transport, and housing sectors all contribute to the persistent inflationary base, with rent and maintenance costs embedded deeply in the CPIH calculation.

Looking ahead, economists are watching for signs of further easing, particularly as global supply chains have normalized and energy markets remain relatively calm. However, unexpected shocks—whether geopolitical or climate-related—could quickly shift the trajectory. For now, the 3.5% figure offers a tentative signal of control, but not yet full relief for consumers still adjusting to a higher-cost reality.